With a wealth of experience evaluating the complex ecosystems of cloud providers and their strategic applications, Maryanne Baines is a leading authority on enterprise technology and corporate leadership. We sat down with her to dissect the recent news from ServiceNow, exploring the strategic implications of CEO Bill McDermott’s amended contract. Our conversation delves into the growing trend of co-CEO structures in big tech, the delicate balance between public statements and regulatory filings, and what these moves signal about the future of executive succession planning.
Bill McDermott’s amended contract extends to 2030 and introduces potential co-CEO or chairman roles, a significant change from his 2019 agreement. What do you believe is the primary strategic driver for this change now, and what specific company growth milestones might trigger such a leadership shift?
The primary driver here is securing long-term, proven leadership while building in maximum flexibility for the future. Extending McDermott’s contract to 2030 sends a powerful message of stability to investors and the market. He’s a known quantity who has delivered. The introduction of co-CEO or chairman roles isn’t about an imminent change; it’s about future-proofing. It gives the board options. A trigger for a shift could be a massive acquisition where they want to retain the acquired company’s leader, or perhaps as ServiceNow scales, they might divide responsibilities between an operational CEO and a strategic, visionary one. It’s a chess move, setting up the board for the next decade, not just the next quarter.
The text notes McDermott’s co-CEO history at SAP and cites other tech giants like Oracle adopting this model. Drawing on that precedent, could you describe the specific operational or cultural challenges that typically arise in a co-CEO structure and provide a step-by-step example of how they are overcome?
The single greatest challenge is the potential for ambiguity, which can paralyze an organization. Employees need to know who the final decision-maker is, and if two leaders give conflicting directions, it creates chaos. First, you must have an ironclad, public delineation of duties. For example, one CEO might own product, engineering, and R&D, while the other owns go-to-market, sales, and customer success. Second, there needs to be an established, non-negotiable protocol for resolving disagreements, often with the board chair acting as the final arbiter. Finally, the two leaders must commit to a unified front externally and internally. Any hint of a fissure between them will be exploited by competitors and create internal factions. McDermott’s experience at SAP between 2010 and 2014 means he’s lived this; he knows precisely where the landmines are buried.
While ServiceNow’s public statement claims no leadership changes are imminent, the SEC filing explicitly outlines compensation for roles like Executive Chairman. How do you interpret this discrepancy, and what does it signal about the board’s approach to long-term succession planning and executive retention?
This isn’t a discrepancy so much as a sophisticated, two-pronged communication strategy. The public statement is for the market, customers, and employees—its purpose is to project stability and prevent disruptive speculation. The message is “business as usual.” The SEC filing, however, is a legal document for investors and regulators. It must outline all material possibilities to be transparent. What this signals is a very mature and proactive board. They are showing they can both reassure the company in the present while legally and financially preparing for a variety of future scenarios. It’s a textbook move in good corporate governance: lock in your star leader for the long haul, but also build the framework to ensure a smooth transition of power years down the line, whenever that may be.
What is your forecast for the adoption of the co-CEO model in the enterprise software industry over the next five years?
I don’t believe it will become the default, but I forecast it will become a more frequently used strategic tool, particularly for the largest and most complex players. The sheer scale of a global software giant today is immense, and splitting the top job can be a logical way to manage that complexity. We’ll likely see it deployed in two key scenarios: post-merger integration to retain key talent from an acquired company, and in hyper-growth firms like Oracle where one leader can focus internally on product innovation while the other focuses externally on sales and market expansion. It’s a demanding structure that requires immense trust and a lack of ego, but for the right pair of leaders, it can be a powerful competitive advantage.
